UNCTAD-VII: REGIONAL GROUPS DIFFER IN APPROACH TO SESSION.

Apr 3, 1987

UNCTAD-VII: REGIONAL GROUPS DIFFER IN APPROACH TO SESSION.

GENEVA APRIL 1 (IFDA/CHAKRAVARTHI RAGHAVAN) --Significant differences between the OECD group of countries and the other regional groups in their approaches to the forthcoming seventh session of the UN Conference on Trade and Development have emerged at the trade and development board session here.

The board heard statements from regional spokesman Tuesday evening on how they view the conference and issues before it, and what they expect out of it.

The group of 77, socialists, and China felt that the conference should deal with the international economic crisis, particularly its impact on the third world, and the international environment responsible for this, and undertake international measures to overcome the crisis.

But the OECD group left little room for doubt that it would focus at UNCTAD-VII on domestic policies of the third world and promote market-oriented policies in these countries.

The OECD group also wanted the organisation to emerge out of the conference with "significant changes of approach", and with "realistic and relevant programme of work" falling within UNCTAD's mandate that would enable it to focus effectively on issues of "central importance".

Though this last appeared wide, the remarks of the OECD spokesman, Amb. John Sankey of the U.K., suggested that the central issue for the group was the "primary role of domestic policies (in the third world) and complementary role of the international community".

G77 sources said that the OECD group's views at the board was similar to what individual group members had been advocating in private discussions, and that G77 delegates as well as others had rejected such an approach.

The G77 sources noted in this connection the remarks Tuesday evening of the UNCTAD Secretary-General, Kenneth Dadzie at a ceremony unveiling the portraits of two former Secretaries-General of UNCTAD, Raul Prebisch and Manuel Perez Guerrero.

Dadzie had said on that occasion that the policy conclusions from Prebisch's theoretical works on centre-periphery relations, which had provided the intellectual foundations for the establishment of UNCTAD, had called for "democratic participation of developing countries in the management of the world economy".

"UNCTAD's central message over the years", Dadzie had declared, "...has been that the external trading and financial environment is a key factor in determining development performance and that it needs to be continuously adapted and restructured through multilateral cooperation in support of the development process".

"Developments in the 1980's have proven the correctness of UNCTAD's perspective, and underscore the need for action across a broad spectrum, including trade and finance, geared towards promoting the development process ... the challenge for UNCTAD is to continue to develop these approaches and UNCTAD-VII must meet that challenge".

The G77 sources said that some OECD group members had told them that within the group the U.S. had been taking a "hard line", almost reverting to the heritage foundation-type attacks of three years ago, and that the G77 should make some moves to accommodate the U.S. position in order to make UNCTAD effective.

However, G77 sources explain, neither they nor other regional groups would have any use for an UNCTAD to promote U.S. ideological perceptions. While the G77 had made an effort to accommodate the viewpoints of OECD countries over the agenda discussions and had gone as far as they could to meet U.S. wishes, the G77 were not prepared to modify or change UNCTAD's comprehensive mandate or its outlook.

The sources said the delegates, at an informal supper last week, had told third world delegations that the U.S. did not see any role for UNCTAD other than as "a place for discussion" and a "study centre", and that the U.S. was yet to decide whether it should participate in UNCTAD-VII, and if so whether as a full delegate or only as observers, and at what levels.

With such an U.S. attitude, there was no meeting ground for any compromise, and it was for other OECD countries to decide whether they would continue to take shelter behind U.S. "ideological hang-ups" and adopt its stand, or whether they would take up a position of their own, as many of them claim they want to.

Speaking at the board session on the organisation of the conference, the spokesman for the group of 77, Amb. Kemal Hacine of Algeria noted that his group had supported the conference focusing on specific points relating to the grave economic crisis facing the world economy and particularly the third world.

The problems of debt and resources for development had become such that various solutions for the debt crisis were no longer sustainable politically and socially. The trading system was not supportive of the development efforts of the third world and discriminated against them, and expansion of world trade, including facilitation of trade and economic exchanges among countries with different economic and social systems, should be one of the elements of development.

UNCTAD should help deepen and increase the coverage of products under the generalised scheme of preferences, and special efforts made by the international community to achieve the targets of international support pledged for the least developed countries.

A common message out of the regional preparatory meetings of the group (at Dacca, Addis Ababa and San Jose), Hacine said, was the need for UNCTAD-VII to agree on the size of the problems which now confront the economies of the third world countries and the hopes of these countries in international cooperation appropriate to these problems.

In this vast enterprise of cooperation for development, the Ministers of the countries of the group of 77 were convinced that UNCTAD, with its universal character and comprehensive mandate, could exercise and appreciable influence.

Sankey told the board that the aim of UNCTAD-VII should be to strengthen the partnership between the industrial and third world countries "based on the primary role of domestic policies and the complementary role of the international community".

The OECD group of countries recognised the difficult economic situation facing the third world countries, but it was necessary to see why many of them, particularly the indebted and commodity-dependent countries, had encountered serious obstacles.

Overcoming these obstacles entailed focusing on a number of important policy areas in the countries concerned - appropriate macro-economic policies, promotion of domestic savings for investment, and liberalization of trade policies.

In this regard, in the OECD view, market forces provided vital signals and guidance to further reinforce and rationalise the structural adjustment process.

All countries should endeavour to foster an international economic environment favourable to growth. Among actions required were: reduction of internal and external imbalances, opening of markets, promotion of sustainable and non-inflationary growth, reduction of real interest rates, securing more stable exchange rates at appropriate levels, and provision of adequate and diversified financial resources to the third world countries.

Sankey said his group viewed UNCTAD-VII as an important challenge "in which complex economic issues will have to be squarely tackled", but this would require "realism and constructive dialogue" form all participants.

"We should seek to ensure that the organisation emerges from the conference with continued and significant changes in approach as well as guidance for a realistic and relevant programme of work that falls within UNCTAD's present mandate and which will enable the organisation to focus effectively on issues of central importance".

Poland's Piotr Freyberg, speaking for the Socialist Group of countries, said UNCTAD-VII's important objective should be to reactivate multilateral dialogue on the most acute international economic issues in order to ensure a "secure and predictable" trade and economic environment for the development of all countries.

The socialist countries also wanted to see UNCTAD strengthened as a universal international organisation endeavouring to find a common approach to the global problems in the inter-related areas of trade, money and finance and development.

UNCTAD-VII there should elaborate of concrete measures for a fair solution of the debt problem in the interests of all countries and at reducing capital outflows from debtor countries, including those resulting from the operation of TNCS.

The Polish delegate also underscored the need for preserving UNCTAD's role as a forum for trade policy issues, and to deal with the issues of the international trading system, based on non-discrimination and application of MFN to all.

The socialists also favoured commodity market stabilization measures, and particularly through international commodity agreements, as well as dealing with issues of access to markets for commodities, including agricultural products.

China's Li Zhimin underscored the great hopes pinned on UNCTAD-VII by all countries, and particularly the third world countries, and said the session would provide an excellent opportunity for promoting development of the world economy and trade, and particularly that of the third world.